How Businesses Can Finance Nature-Based Solutions

Ecosystem services like clean air and water, healthy soils, flood management and climate regulation are not luxuries; they are foundational to life and economic activity. More than half of the global economy is moderately or highly dependent on nature — which is rapidly being degraded.

Since every society, and therefore every economy and business, relies on nature’s services to function, all companies have a role to play in its conservation and restoration. Companies increasingly realize this.

Between 2022 and 2024, the share of Fortune 500 companies that set targets for preserving or restoring nature or acknowledged its importance in their business strategies grew significantly. Despite the current political environment, many remain committed to advancing sustainability-related initiatives.

Yet companies often have a hard time moving from pledges and planning to real action. The private sector currently contributes just 18% of all nature-positive investments, leaving much room for growth.

There are many reasons for this disconnect: Reporting and disclosure processes can be a burden. Incentives are often misaligned. Large-scale corporate financing for nature is still in its early stages, and some companies simply aren’t sure where or how to begin.

But financing nature can be more accessible than it seems. Indeed, new WRI research shows that companies don’t necessarily need large teams or sustainability budgets to act — what they need is a more effective approach.

Financing Nature Is Good Business

Nature is not an abstract responsibility; it is a tangible asset that businesses can manage, protect and restore for measurable impact, whether or not it directly relates to their value chains. When companies finance nature and “nature-based solutions,” they achieve real benefits — from enhanced resource security to stronger brand reputations. In turn, nature regenerates, increasing its value and providing essential services for businesses and communities alike.

For example, Six Senses Laamu (a coastal tourism business in the Maldives) is protecting hundreds of acres of seagrass. This will support turtle and fish populations, enhance the ocean’s carbon absorption capacity, and help protect against climate risks like storm surges. Critically, keeping local ecosystems healthy is also part of what keeps tourists coming back.

Elsewhere, food and beverage companies are investing in pollinator habitat restoration to protect their agricultural supply chains. General Mills is working with farmers to plant wildflower meadows and hedgerows, supporting pollinators for crops like almonds, oats and wheat. Unilever has incorporated pollinator conservation into its regenerative agriculture strategy, encouraging farming methods that promote biodiversity and soil health. These efforts improve crop yields, ecosystem resilience and soil fertility, as well as reduce reliance on harmful synthetic inputs.

Even companies in sectors like technology — which may not have visible land-use impacts, but still influence ecosystems through energy consumption, supply chains and data infrastructure — can play an important role in protecting and restoring nature. For example, Salesforce supports nature conservation as part of its broader strategy to mitigate climate risks, achieve net-zero goals and reinforce its brand value.

What’s Blocking Companies from Taking Action?

While initiatives like these show great promise, they’re still few and far between. In 2022, only $200 billion was allocated to nature-based solutions, with 82% of this coming from governments. To meet global climate and nature targets, finance for nature-based solutions must nearly triple to $542 billion per year by 2030 and quadruple to $737 billion per year by 2050, with private companies playing a much bigger role.

Yet that’s easier said than done. We surveyed representatives from 41 companies of varying sizes and sectors and learned that they face a range of challenges in mobilizing finance for nature initiatives.

One reason is the persistent mindset that nature is merely a “nice-to-have” rather than a business imperative. This leaves some companies unaware of, or indifferent to, the benefits of nature initiatives.

How most key performance indicators (KPIs) and targets are structured may also be a barrier: The mid- to long-term planning often required for large-scale nature financing can be challenging for companies accustomed to short-term profit and loss considerations. Companies may struggle to identify a clear business case for financing nature initiatives, as the economic returns may be broad and longer-term, and less easily attributed to their own operations.

However, this is slowly shifting. Innovative finance models are resulting in companies beginning to place nature on their balance sheet and to invest in natural asset companies whose returns are based on environmental performance. Furthermore, nature continues to get broad public and political support, implying that not paying proper attention to nature may risk reputational and operational risks in the long run.

Finally, we found that companies can end up spending more time and resources assessing and reporting on nature than actually implementing projects. This stems in part from a fragmented reporting landscape; some companies currently use more than 3,000 metrics to describe nature-related outcomes in their sustainability disclosures. Investors also require clear, quantifiable data, which can push companies to focus on reporting rather than pursuing new solutions. In fact, one recent study revealed that spending on sustainability reporting exceeds spending on sustainability innovation by 43%.

A Practical Approach to Corporate Nature Action

These myriad challenges can create a sort of analysis paralysis, with companies so mired in planning, assessing and reporting that they fail to deliver progress at the pace and scale needed. While building a business case and evaluating potential risks and opportunities are all critical, the speed and scale of the nature crisis demand more urgent action.

WRI has developed a structured decision-making framework to help companies move beyond prolonged assessments and take meaningful action for nature. Core to this framework is “ARK” approach:

1. (A)ssess support with key internal and external stakeholders and identify relevant opportunities for nature.
2. (R)efine operational mechanisms by integrating nature into corporate strategy, securing financing and engaging with key stakeholders.
3. (K)ick off and evaluate implementation with a clear governance structure; monitoring, reporting and verification (MRV) systems; and ongoing evaluation to ensure long-term success.

The ARK framework emphasizes swift yet strategic decision-making. By following these steps, companies can transition from concept to implementation more efficiently, helping to avoid delays that hinder progress.

1) Assess support and action for nature

Among the companies we interviewed, nature initiatives were largely limited to sustainability teams. But securing broader company support is important to driving meaningful action. Engaging multiple departments, socializing nature initiatives across the company, and fostering a shared understanding of their benefits can support a more collaborative and effective approach. This, in turn, can foster long-term commitment, integration into business strategies and, ultimately, successful implementation.

Externally, partnering with NGOs, academic institutions, Indigenous groups and local communities can build more effective initiatives. According to our interviews and surveys, external parties were seen as helpful to provide expertise, share best practices, and streamline project design and implementation. This can be especially important if in-house teams are not established or do not have specific training or expertise in the field. Engaging with consortiums where companies share insights in collaborative manner (such as LEAF Coalition and the Symbiosis Coalition) can also help identify credible partners for evaluating nature financing options.

2) Refine operational mechanisms

The next step is to set up and refine operational mechanisms for nature initiatives, such as internal governance and strategy, financial mechanisms, and supply chain management and procurement.

Conflicting KPIs and targets need to be identified and addressed from the start. As several interviews indicated, middle management may be particularly hesitant to advance nature-based projects when their targets are focused on increasing sales, revenues and margins. Sustainability or nature-oriented targets (which may generate non-financial or hard-to-quantify benefits) can be perceived as misaligned with these goals. Even after senior executive buy-in, effective communication and alignment with middle management are critical.

Some companies we interviewed are developing strategies to address competing interests. For example, a multinational pharmaceutical company successfully integrated sustainability into its management remuneration by ensuring that every middle manager was also compensated based on sustainability targets. A European building material company offers internal incentives for progress against sustainability goals, with approximately 30% of senior executives’ bonuses linked to sustainability.

3) Kick off and evaluate

Companies should involve local communities, NGOs and government bodies in their implementation plans to ensure strong and sustained support. Nature initiatives are long-term endeavors that often involve or impact nearby communities, which means they need buy-in from relevant parties — including incorporating local knowledge and customs. Without this, projects could risk local pushback, drive social and economic displacement, or simply fail to deliver the intended outcome. There are risks to companies, too, including accusations of greenwashing claims and reputational damage.

Monitoring and evaluation (M&E) systems are important for ensuring that activities meet their objectives in the most efficient and effective way possible. Properly designed M&E systems allow for iterative and adaptive learning, meaning companies can improve implementation over time. This may help relieve some of the burden of assessing every potential outcome upfront.

One respondent recommended that, given the subjective nature of some aspects of environmental work, having a credible third-party partner to validate progress is essential. Transparency around a project’s strategy, parameters and MRV processes — coupled with an iterative approach to improvement — can also help build confidence among investors and partners.

Another interviewee pointed out that, despite a wealth of learning and data collected in the field of nature-based solutions, much of this remains siloed within divisions, companies and sectors, limiting opportunities for collaboration and knowledge sharing. Greater cross-collaboration between companies and across industries and regions can help address this challenge and enable action on a larger scale.

For example, through the Rimba Collective, consumer goods manufacturers are working together to achieve their corporate sustainability objectives over the long-term, at scale, by protecting and restoring natural landscapes and supporting livelihoods. By collaborating, these companies can aggregate projects and landscape initiatives, along with impact KPIs, to mitigate risks associated with earlier-stage projects.

Embracing Nature as a Business Imperative

The path forward is clear: Businesses must treat nature as a strategic asset, essential to driving innovation, building resilience and creating long-term value. By securing supply chains, reducing liabilities, unlocking financial opportunities and enhancing brand value, companies that embrace this approach today will set themselves up to lead the future economy.

The good news is that meaningful change is achievable. By integrating nature into core business strategies, financing impactful projects and collaborating across sectors, business leaders can drive the transformation needed to restore and protect the planet’s life-support systems — the foundation of our societies and economies.